The Pilgrim Nuclear Power Station Study a SOCIO-ECONOMIC ANALYSIS and CLOSURE TRANSITION GUIDE BOOK
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The Pilgrim Nuclear Power Station Study A SOCIO-ECONOMIC ANALYSIS AND CLOSURE TRANSITION GUIDE BOOK Jonathan G. Cooper UNIVERSITY OF MASSACHUSETTS AMHERST | APRIL 2015 Project Team This project was undertaken by the Center for Economic Development (CED) in the Department of Landscape Architecture and Regional Planning at the University of Massachusetts Amherst. Throughout the project, the CED consulted with the Institute for Nuclear Host Communities (INHC). The project was directed by the Center’s Assistant Director, Dr. John R. Mullin, FAICP, and the report was written by Graduate Research Assistant Jonathan G. Cooper. About the Center for Economic Development The CED is a research and community-oriented technical assistance center that is partially funded by the Economic Development Administration in the U.S. Department of Commerce. The CED is housed in the Department of Landscape Architecture and Regional Planning. The Center’s role is to provide technical assistance to communities and other non-profit entities interested in promoting economic development; to undertake community-based and regional studies; and to enhance local and multi- community capacity for strategic planning and development. About the Institute for Nuclear Host Communities The INHC formed in 2013 to help communities prepare for the socioeconomic impacts of plant closure. Its mission is to provide the communities that host nuclear power plants with the knowledge and tools they need to shape their post-closure future. INHC work has focused on building connections between the parties involved in and affected by nuclear plant closure, and conducting objective research into the socioeconomic impacts of plant closure. Consulting support for this project was provided by INHC members Jeffrey Lewis, Jennifer Stromsten, and Dr. Paul Kostecki. Acknowledgements We wish to thank Plymouth Director of Planning and Development, Lee Hartmann, AICP, Plymouth Director of Finance Lynne Barrett, and Old Colony Planning Council Executive Director Pat Ciaramella for their support of this study. We are grateful to a number of individuals who have contributed to the contents of this report in one way or another. Chris Campany, Executive Director of the Windham Regional Commission in Vermont, has been an invaluable source of information and perspective. From the Entergy Corporation, Lauren Burm, Martin Cohn, Joseph Lynch, and Joyce McMahon have taken the time to discuss several issues with us. We would also like to single out Entergy’s Meghan Leahy, who has been in touch with us for more than a year. Lastly, we are grateful for the work of three graduate students at the University of Massachusetts Amherst, who researched this topic extensively throughout the fall of 2014 as part of Dr. Mullin’s Economic Development Practicum. To Madison Burke, Brandon Gibbs, and Michael Havlin, who applied their knowledge, skills, and resourcefulness to a number of tasks: congratulations on a job well done. 1 Executive Summary This Guide Book estimates the socioeconomic impacts of the Pilgrim Nuclear Power Station (“Pilgrim Station”) on the Town of Plymouth, the Old Colony Planning Council (OCPC), and neighboring cities and towns. It does not endorse any perspective for or against nuclear power, focusing only on the impacts of Pilgrim Station’s operations and the impacts of decommissioning should it occur. The plant’s direct impacts are identified first, followed by estimates of secondary impacts that come from the business and household spending caused by Pilgrim Station’s expenditures. The Guide Book then estimates the impacts Pilgrim Station’s closure would have on Plymouth and broader economies. This section of the report presents the Guide Book’s major findings. Pilgrim Station in 2014 Direct Impacts $440 Million Wholesale value of electricity produced 586 Pilgrim Station workforce $77 Million Wages and benefits for plant workforce $60 Million Spending for goods and services in southeastern Massachusetts $17.4 Million State and local taxes and other payments $300K Charitable giving by Entergy and Pilgrim Station Secondary Impacts $105 Million Additional economic output attributable to Pilgrim Station 589 Additional jobs created by Pilgrim Station $30 Million Wages and benefits paid by additional jobs Town of Plymouth Impacts 190 Pilgrim Station employees living in Plymouth $24.9 Million Wages and benefits paid to plant employees $58.5 Million Value of real estate owned by plant employees $10.3 Million Municipal revenue from Pilgrim Station $950K Municipal revenue from employee property tax payments $23K - $61K Municipal revenue from biennial refueling outages 2 Significant Findings Pilgrim Station is a vital part of a regional economy that lags behind the state in key indicators of economic performance. Pilgrim Station’s most significant direct impact is the hundreds of well-compensated jobs it provides. As of February 2015 there were 586 employees at Pilgrim Station, with a payroll of approximately $55 million and a weekly wage of $1,805. This represents 2.5% of the jobs held in Plymouth, and 5.3% of the wages paid in Plymouth. The average weekly wage at Pilgrim Station is 50 percent higher than the state average, and more than double the average wages in Plymouth, the OCPC, and Barnstable County. These jobs also provide considerable fringe benefits not included in the payroll total, likely raising the overall compensation value by 40 percent, to approximately $77 million. Much of the Pilgrim Station workforce lives in the towns closest to the plant, which keeps much of the earned income within southeastern Massachusetts. Nearly 85 percent of employees live in either Plymouth or Barnstable counties. By a wide margin, Plymouth is the most common place of residence, with 190 employees. Only five other towns are home to as many as 20 employees: Sandwich, Carver, Kingston, Bourne, and Marshfield. As a result, $17.8 million in Pilgrim Station wages is earned by Plymouth residents, and $7.2 million by other residents of the OCPC, $10.7 million by residents in SRPEDD towns, and $10.2 million by residents of the Cape. Adjusted to include benefits, Plymouth’s total value approaches $25 million. Pilgrim Station’s non-payroll expenditures were approximately $77.5 million, and provided a substantial source of revenue to local businesses and municipalities. More than 25 percent of Plymouth County businesses are in one of six industry subsectors that meet the procurement needs of nuclear power plants, likely accounting for the bulk of the estimated $60 million in procurement spending throughout Plymouth and Barnstable counties. Along with this spending, Pilgrim Station made more than $17 million in state and municipal payments for taxes and emergency preparedness funding. Approximately $10 million was paid to the Town of Plymouth alone, representing over 7 percent of the Town’s total levy of $138.4 million for Fiscal Year 2015. 3 Pilgrim Station’s direct impacts generate substantial secondary impacts throughout the region. Pilgrim Station’s operation stimulates additional economic activity in Plymouth and Barnstable counties. The in-region spending by both Pilgrim Station vendors and plant employees creates an additional $105 million in regional economic output. Much like Pilgrim Station’s direct economic output of $440 million supports 586 jobs with labor income of $77 million, the plant’s secondary economic output of $105 million supports 590 jobs in the two counties, with earnings of nearly $30 million. Spending by Pilgrim Station employees makes a significant impact on industries outside the nuclear power plant supply chain. Nuclear power plant employees enjoy relatively high wages and comprehensive health care packages. As a result, hospitals and other health practitioners’ offices in the region benefit significantly from the Pilgrim Station workforce. Household spending is also disproportionately high at real estate establishments, restaurants, and financial institutions. Nuclear power plant employment is stable and well-compensated, enabling employees to attain home ownership. Based on current median home values, the property owned by Pilgrim Station employees living in these ten towns is over $135 million, with $58.5 million in Plymouth alone. The residential property taxes generated by this group reach $1.95 million annually, with $908,000 collected by Plymouth. This is augmented by motor vehicle excise tax payments, which are estimated to reach $45,000 per year in Plymouth, based on the substantial number of employees living there. 4 Table of Contents Executive Summary 2 Part One: Introduction 6 1.1 Project Goals and Objectives 6 1.2 Document Structure 6 Part Two: Closure and Decommissioning 8 2.1 Nuclear Power Plant Closure 9 2.2 Nuclear Industry Challenges 12 2.3 Nuclear Decommissioning 15 Part Three: Pilgrim Station 21 3.1 Site and Operations 21 3.2 Employee Characteristics 25 Part Four: Impacts of Pilgrim Station 30 4.1 Direct Operational Impacts 31 4.2 Secondary Operational Impacts 43 4.3 Closure Impacts 48 Part Five: Recommendations 52 5.1 Building Knowledge 52 5.2 Building Support 53 5.3 Building Momentum 54 Appendix A: Cleanup Standards 56 Appendix B: Spent Fuel Lawsuits 58 Appendix C: Post Closure Community Snapshots 60 5 Part One: Introduction The goal of this project is to create a Guide Book specific to Plymouth and its region that identifies the critical post-closure socioeconomic issues, pinpoints possible strategies to address them, and clarifies the roles for local and